This paper contributes to the existing literature in proposing an integrated approach to water management and energy renewable production in a fragile environment. After the 2004 tsunami, in many outer islands in The Republic of Maldives, the lens freshwater natural reservoir was deeply damaged. Currently, the populations of rural atolls use rainwater and water in plastic bottles imported from the mainland for drinking. To provide safe and sustainable drinking water, we analyze the feasibility of two different actions: a desalination system fed by a diesel plant or by a photovoltaic (PV) plant with batteries. The current situation (business as usual, (BAU)) is also evaluated and taken as a benchmark. After illustrating the technical and economic features of desalination and PV plants, a financial and environmental analysis is conducted on the two alternatives plus BAU, showing that the desalination fed by the PV plant results in optimization both on the financial and the environmental side. The levelized cost of water (LCOW) and the CO2 levelized emissions of water (LEOW) are calculated for each alternative. The case study is developed in Magoodhoo Island, Faafu Atoll and can be extended to other islands in The Republic of Maldives and in general to small island developing states (SIDS).